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Level 2
December 7, 2019
Solved

Can SE health insurance deduction be taken if policy is in name of non-working spouse? The plan covers proprietor and spouse. Community property state.

  • December 7, 2019
  • 1 reply
  • 12 views

Sole proprietor asks spouse to take care of setting up marketplace plan, but creates plan in their own name.  

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Best answer by TaxGuyBill

I would take it, but it is a "gray area".  Prior to 2012, I would have said "no".

CCA 201228037 says that a spouse's Medicare can be used for the SEHI deduction.  A spouse's Medicare MUST be in that spouse's name, not the sole proprietor's name.  Personally, I extend that concept and allow any insurance in the spouse's name to qualify.  From my viewpoint, the Sole Proprietor's "plan" is to pay for the insurance, regardless of whose name is on the policy.

https://www.irs.gov/pub/irs-wd/1228037.pdf

But as I said before, it is a "gray area" and there ARE people that will strongly argue against it.



1 reply

Level 15
December 7, 2019

I would take it, but it is a "gray area".  Prior to 2012, I would have said "no".

CCA 201228037 says that a spouse's Medicare can be used for the SEHI deduction.  A spouse's Medicare MUST be in that spouse's name, not the sole proprietor's name.  Personally, I extend that concept and allow any insurance in the spouse's name to qualify.  From my viewpoint, the Sole Proprietor's "plan" is to pay for the insurance, regardless of whose name is on the policy.

https://www.irs.gov/pub/irs-wd/1228037.pdf

But as I said before, it is a "gray area" and there ARE people that will strongly argue against it.



yezpaulAuthor
Level 2
December 7, 2019
Thank you for your response!